CPFL Files Renewables IPO

Brazilian power company CPFL has filed for the IPO of its CPFL Energias Renovaveis unit, according to regulatory documents. It plans to offer primary shares, as well as secondary shares owned by several investment funds, including those linked to Patria Investimentos and Bradesco. It does not indicate size or timing, though a filing this week sets up a mid-June launch. The market is expecting a deal for at least BRL1bn ($525m), given the issuer’s large funding needs. CPFL plans to use 80% of the funds raised to develop new projects, and the remainder for acquisitions. Bank of America Merrill Lynch and Itau are global coordinators, with Morgan Stanley, Bradesco and Banco do Brasil as bookrunners. The unit recorded pro-forma Ebitda of BRL377.5m in 2011. It has 46 small hydroelectric, biomass and wind generation projects in operation, with 850 megawatts of capacity. In addition, it has 30 projects under construction, totaling 885 megawatts, and 39 in development, totaling 3,092 megawatts. ECM bankers expect several filings in Brazil in the coming weeks, in order to price deals before the July-August holiday season.